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Asia Pacific’s office markets saw generally healthy rental activities in the first half of 2016, with most markets posting steady growth despite global headwinds, revealed a Cushman & Wakefield report.
According to the report, rentals in most office markets in the region are either stable or on an upward trend this year, with the exceptions of a few supply-heave markets like Jakarta and Singapore.
Specifically, the Indonesian capital saw the highest annual rental decline of 19.0 percent, followed by Singapore which saw rents fall by 10.4 percent. The property consultancy said rentals in Jakarta will continue to slide going forward due to substantial new completions. However, office rents in the city-state is expected to stabilize by the end of the year or in the first quarter of 2017 due to an expected pickup in absorption.
Meanwhile, tenant activities in India, Tokyo, Australia and tier 1 markets in China lead the region’s office rents.
India’s technology-centric cities like Bengaluru, Hyderabad, and Chennai have limited availabilities at the same time that occupiers are actively pre-leasing space, indicating landlord-favourable conditions. Delhi-National Capital Region (NCR), Mumbai, and Kolkata, however, remained tenant-favourable, with vacancy rates at 16.8 percent, 24.7 percent and 42.4 percent respectively.
Office demand in Australia and China, on the other hand, were supported by the services sector, especially financial and technology-related services.
In addition, Manila saw strong pre-leasing demand from the Business Process Outsourcing (BPO) sector, pushing vacancy rates to ultra-low levels at 1.6 percent at end-Q2 2016. However, the large incoming supply through next year will keep market conditions neutral, said the report.
The report also noted that Asia Pacific witnessed the highest growth in global financial technology (fintech) investments in 2015, with fintech start-ups from the region accounting for more than 50 percent of global venture capital raised in Q1 2016.
“Regional banks, including the Development Bank of Singapore (DBS), Australia and New Zealand (ANZ), United Overseas Bank (UOB), Oversea-Chinese Banking Corporation (OCBC), Mizuho, Maybank, etc. are all eager to adopt such technologies,” it said.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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